Invensys climbs on bid reports

Invensys was the big climber this morning, on the back of yesterday's Observer report that foreign bidders are circling the FTSE 100 engineering giant.

Predators include Honeywell and Emerson Electric of the US, ABB of Switzerland, Alstom of France, Germany's Siemens and two Chinese firms, CSR and CNR, city sources said.

No offer has been tabled, but potential bidders are said to be reviewing their options.

The shares rose 4.9%, or by 17p, to 362p.

The FTSE 100 itself was up 4 points by 9:45am to reach 6,087, pushed along by pharma, mining and oil stocks.

The banks were the big drag on the index, knocking 56 points off the blue-chips.

Among the smaller stocks the big story was Ocado falling 6%, as it emerged that Waitrose was set to go head-to-head with the online home delivery business. Shares in Ocado were down 15.6p to 243p.

As far as the big corporate announcements are concerned, there were two blue-chip deals to digest, as well as Hammerson's results for 2010.

Hammerson's net rental income was down 3% to £284.7m, while its adjusted net asset value per share was up 17.6% to £4.95.

Alan Carter of Evolution Securities said:

The sector feels half full at the moment, and another strong set of figs from Hammerson will keep it going. This highly focussed portfolio plays to the company's core management skills, but this business continues to be de-risked and produce best in class returns. Aggressive capital re-cycling has always been the forte, and 15% portfolio churn is above norm but is a genuine upgrade from mature to opportunity. Much less exposure to development than sector peers is appealing while the gearing level continues to tumble. Vast bulk of NAV growth was down to yields hardening, and there is a hint of retail rents falling a fraction, which is no surprise. That trend may well continue.

Richard Curr, head of dealing at Prime Markets, had this to say:

The results shows strength across the board, with improved net income growth and occupancy levels, and a corresponding return to profit and consequent improvement in earnings per share. The group have also been selectively disposing and acquiring assets throughout the year, and Prime Markets believe this active management approach will continue to serve the group well and help maintain a strong financial performance as 2011 progresses. Our view is supported by a strong technical picture, with visibility through to sub 500p levels.

Hammerson shares were up 1.6%, or by 7p, to 455p.

On the deal side, Amec has bought Qedi, a project delivery company specialising in oil and gas, for £33m. The shares tracked the FTSE 100 up by 0.18%, or 2p, to £11.42.

More substantially, Diageo has bought Mey Içki, Turkey's leading spirits company, for £1.3bn. The company is the clear market leader in Raki, the biggest spirits category in Turkey, and also has a leading market position in vodka. There will be plenty more to say on the deal as the day goes on, but at 9:45am the market was relatively muted - the shares up 0.33%, or by 4p, to £12.04.